At 20:58 14/08/97 -0700, you Rieu wrote:
>Yes, his example itself is correct.
>In fact, this is one of the two cases in the simultaneist system.
>1)wage=0 case 2)full automation case(i.e. l=0)
>To think in the Sraffian way will clarify point.
>>From the simultaneist system, p=(pA+wl)(1+r), the general rate of profit(r)
>is determined by only the structure of matrix A(i.e. max. eigen value).
______________
In your formulation above, wage goods are treated as basics, and so it will
affect the rate of profit. Thus, it would be incorrect to say that only
matrix A would determine the rate of profit (r). w is a determinant of r as
well.
In my opinion, the basic question one needs to ask on this issue is, why
should a change in production condition of a 'luxury good' (i.e. non-basic)
have any impact on the long term prices of capital and wage goods? Cheers,
ajit sinha